Fools errant

Whacking the bank led by Jamie Dimon over last year’s $6.2 bln trading loss was a given – and deserved. Many of the subcommittee’s claims that JPMorgan misled the OCC smack of political grandstanding. But the portrayal of the regulator as a bumbling fool looks spot on.

Context News

Senior managers at JPMorgan Chase were told for months about the bad derivatives bets that ended up costing the bank $6.2 billion but did little to rein them in until it was too late, according to a U.S. Senate report released on March 14.
Telephone calls and instant messages show traders felt pressure to misstate the values of the derivatives and were upset about doing so, but the bank stood by the prices and said in an internal document they were “consistent with industry practices,” according to the report. The bank has described the position as one caused by rogue traders and the bank’s lack of proper oversight and risk limits.
The Senate panel said five risk limits already in place were breached in early 2012. The bank lifted the limits or altered the risk measures to improve the results, the report said.